Equity Analysis /

Thailand: Agro & Food - Livestock: Live chicken re-pegged on farmgate price

  • Fixed live chicken price at Bt33.5/kg dropped, thankfully

  • Positive sentiment for Thai chicken sector as a whole

  • Ban on imports of live/dead chicken from three countries

Bualuang Securities
19 January 2022

We think that the government’s second round of chicken price negotiations was more favorable for Thai chicken operators due to  relaxation of conditions such as pegging live chicken to the Bt40/kg farmgate price through Chinese New Year and adjusting up some dissected chicken parts price by Bt5/kg. We are positive on “chicken” with a TRADING BUY call on GFPT, CPF and TFG.

Fixed live chicken price at Bt33.5/kg dropped, thankfully   

On Jan 17, the Department of Internal Trade (DIT) had a second round of discussions with relevant parties such as Thai Broiler Raising Association, Thai Broiler Processing Exporters Association, large-scale chicken producers and modern traders and reached the following conclusions—1) using the current live chicken farmgate price of Bt40/kg until the Chinese New Year (Jan 30-Feb 1) to alleviate the high feed cost burden for small-scale chicken farms and abolishing the Jan 11 solution of fixing the live chicken price at Bt33.5/kg for six months and 2) fixing the retail (not wholesale) prices for the whole chicken and dissected chicken parts at a Bt60-75/kg range—whole fresh chicken at Bt60-65/kg, thigh-to-drumstick meat at Bt60-65/kg, thighs or drumsticks at Bt65-70/kg and breasts at Bt70-75/kg until the situation normalizes (against its previous solution of fixing the whole fresh chicken, thighs or drumsticks at Bt60-65/kg and breasts at Bt65-70/kg for six months).